Comptroller of the Currency
Administrator of National Banks

On December 21, 2007, the Office of the Comptroller of the Currency (OCC) published in the Federal Register revisions to its Community Reinvestment Act (CRA) regulation that are effective January 1, 2008. Two separate revisions are made to the CRA regulation in this rulemaking:

• Adjustment of the asset-size thresholds to be used to define “small bank” and “intermediate small bank” based on the annual percentage change in the Consumer Price Index.
• Revision of the paragraph heading to 12 CFR 25.26(a)(1), which will now read, “Small banks that are not intermediate small banks.”

Asset-Size Threshold Adjustment

The OCC’s CRA regulation, as revised on December 29, 2006, provides that national banks that, as of December 31 of either of the prior two calendar years, had assets of less than $1.033 billion are “small banks.” Small banks with assets of at least $258 million as of December 31 of both of the prior two calendar years, and less than $1.033 billion as of December 31 of either of the prior two calendar years, are “intermediate small banks.” 12 CFR 25.12(u)(1). The regulation provides that the OCC will publish annual adjustments to these dollar figures based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW), not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million. 12 CFR 25.12(u)(2).

During the period ending November 2007, the CPIW increased by 2.7 percent. As a result, the OCC is revising section 25.12(u)(1) to make this annual adjustment. Beginning January 1, 2008, banks that, as of December 31 of either of the prior two calendar years, had assets of less than $1.061 billion are “small banks.” Small banks with assets of at least $265 million as of December 31 of both of the prior two calendar years, and less than $1.061 billion as of December 31 of either of the prior two calendar years, are “intermediate small banks.” For further information about how these revised asset-size thresholds are applied, see the CRA page on the Federal Financial Institutions Examination Council’s Web site at www.ffiec.gov/cra.

Revision of Paragraph Heading

The heading to 12 CFR 25.26(a)(1), as revised on September 1, 2005, reads, “[s]mall banks with assets of less than $250 million.” The text associated with this heading is directed to a “small bank that is not, or that was not during the prior calendar year, an intermediate small bank.” The $250 million figure in the heading reflects the pre-2007 threshold for a small bank that is not an intermediate small bank. It does not reflect recent inflationary adjustments to the asset threshold for small banks, including the adjustment made by this rule. In order to remedy this inconsistency, the agencies are rewriting the paragraph heading so that it does not reference the dollar amount of the small bank threshold. Effective January 1, 2008, the new paragraph heading is, “[s]mall banks that are not intermediate small banks.” This revision remedies a potential source of confusion but has no substantive effect.

If you have any questions about the regulatory revisions or about how to determine whether a national bank is classified as a small or intermediate small bank, please contact your supervisory office, the Compliance Policy Department at (202) 874-4428, or the Community and Consumer Law Division at (202) 874-5750.

/signed/                                                 Julie L. Williams First Senior Deputy Comptroller and Chief Counsel

Attachment:   Joint Final Rule
                        [http://www.occ.treas.gov/fr/fedregister/72fr72571.pdf]